Chapter 14.1, Problem 34E

(a)

To determine

To calculate: The value of Q if $K=\$64,000$ and $L=512$ hours. Suppose that a company’s production for Q units of its product is given by the Cobb-Douglas production function $Q=70K^{2/3}{L}^{1/3}$ where K is dollars of capital investment and L is labor hours.

(b)

To determine

To calculate: The output Q if both K and L are halved. Suppose that a company’s production for Q units of its product is given by the Cobb-Douglas production function $Q=70K^{2/3}{L}^{1/3}$ where K is dollars of capital investment and L is labor hours. Interpret the answer.

(c)

To determine

To graph: Q as a function of L if capital investment is held at $64,000. Suppose that a company’s production for Q units of its product is given by the Cobb-Douglas production function $Q=70K^{2/3}{L}^{1/3}$ where K is dollars of capital investment and L is labor hours.